[BIP Proposal] Add sp() output descriptor format for BIP352

In a detailed discussion regarding the development and optimization of silent payment output descriptors in Bitcoin, several key points and concerns were raised. The conversation highlights the computational challenges associated with incorporating optional arguments, like birthdays, into silent payment outputs. This inclusion potentially necessitates significant computational resources to retrieve all silent payment outputs in a wallet, posing a stark contrast to other descriptors that do not carry such a heavy computational burden. The implication here is clear: while optional, the birthday argument might become de facto necessary for practical usability within certain deployment contexts due to these computational overheads.

Further scrutiny was given to the security implications of requiring users to specify their master xprv (extended private key) in an output descriptor for generating silent payment outputs. This requirement raises substantial security concerns, especially for watch-only wallets, as output descriptors are often stored in clear text alongside hardware wallets or similar devices. These descriptors are regarded as privacy-sensitive but not directly security-sensitive information. The need for strong error detection and the use of unambiguous characters in descriptors were underscored, emphasizing the importance of avoiding potential mishaps like key mix-ups, which could lead either to accidental errors or intentional misuse with unforeseen consequences.

The discussion also touched upon the potential benefits of employing versioning in silent payments, despite some skepticism about its necessity. Versioning could allow for different script expressions in future iterations of silent payments, hence providing flexibility and adaptability for both wallet developers and users. This approach aligns well with the preference for familiar formats, such as those already in use with xpubs (extended public keys), suggesting that simplicity and familiarity should guide the evolution of silent payment descriptors.

Lastly, the idea of encoding multiple labels within a single 64-bit number was explored, offering an innovative way to compactly represent various attributes or flags within a descriptor. Although appealing for its efficiency and compactness, this method has limitations, including a restricted range and reduced readability for humans, which could detract from its utility and user-friendliness.

Overall, the conversation encapsulates a thoughtful examination of the technical, security, and usability aspects crucial to the ongoing development of silent payment descriptors in the Bitcoin ecosystem.